Impact of Significant Events on Share Prices: A Comparative Analysis

1. Introduction

The impact of news on the stock market is evident with an emphasis on particular instances,

including the BP oil leak, the SARS outbreak, and Steve Jobs' health. This study investigates

the effect of significant events on share prices. The study intends to determine whether other

businesses or industries encounter comparable effects and how good and bad news events

affect stock prices. The study fills a knowledge vacuum regarding how the market responds

to various events and how those responses affect stock prices.

2. Aim/Objective of the Research

The objective is to investigate how important events impact share prices by examining how

specific companies and more significant market indices respond. Through the analysis of

various occurrences, the study aims to provide insights into the information processing

efficiency of stock markets and their differing effects on multiple businesses.

3. Research Problems and Gaps

The research problem is our incomplete knowledge of how specific events—including good

and bad news—affect share prices. Although a wealth of research has been done on the

overall effects of news on stock prices, it is unclear whether these responses are consistent in

various markets and industries. This gap makes it challenging to comprehend market

efficiency nuancedly because previous research has concentrated on individual cases or

industry sectors. The study aims to close this gap and advance our knowledge of the various

elements that affect stock prices and market dynamics by methodically examining responses

to events over a wide range.

4. Research Questions
 1. What is the effect of significant events on the share prices of 100 Chinese companies

listed between 2018 to 2023?

2. Is the impact of news on a particular industry or the whole market?

3. How much does the change in market interest rates work as a predictor variable

influencing share price movements over a given period?

5. Hypotheses.

H1: Significant occurrences, such as the Pandemic, will statistically significantly affect the

share prices of Chinese companies; the influence will be either favourable or adverse,

depending on the event.

H2: Within the Chinese market, industries will react differently to these occurrences,

suggesting that industry-specific factors impact the stock price response.

H3: Market interest rates will show a statistically significant correlation with share prices,

impacting the direction and size of reactions.

6. Methodology

The primary study uses the regression model, where the dependent variable is the monthly

share prices of the 100 chosen Chinese companies. To eliminate outliers and guarantee

representation across sectors, independent variables include market interest rates and dummy

variables representing significant news events.

7. Data

Reputable web sources such as Yahoo.com will be used to gather monthly share prices for

100 Chinese companies listed between 2018 and 2023. A meticulous screening process will

weed out anomalies and guarantee participation from various industries. Relevant data from

the Chinese market, will be considered for occurrences such as anticipated increase in interest
rates, Chinese national events, and the Covid 19 pandemic. The study provides a detailed

view of market dynamics by covering a considerable amount of time before and after each

event, ensuring a thorough analysis.

Time series data is primarily used in the research to capture the periodic fluctuations in share

prices for the 100 Chinese companies that were chosen. Although time series is the main

emphasis, panel data will be considered in later analyses to provide a more comprehensive

knowledge of industry-wide effects.